Japan’s Ugandan clients count Tsunami losses

Reliable estimation of the effects of the Japan tsunami on trade and investment in Uganda are yet to be established, about a month after the devastating earthquake struck the world’s third largest economy. Official websites that would ordinarily have such information are blank or have old useless data.

A visit to the Ugandan Embassy in Japan website does not yield any relief as you are confronted by a request; “Please visit this page later, we are making some changes!” Uganda’s ministry of foreign affairs website is worse. Its latest information is a press statement on the conclusion of the January elections in Sudan and the July 2010 African Union summit in Kampala

The Japan embassy in Uganda also has no clue. It only has a message from Japan’s Prime Minister NATO Kan regarding the assistance received from overseas on March 22.

Yukihisa Nakano, from Japan’s Akita Prefecture, who works in the Information and Culture Department at the embassy in Kampala, has scanty information about the tsunami impact.

“My home is in Akita prefecture near Miyagi, which was the most affected,” he says. He added that although Akita was not affected by the Tsunami, it has suffered shortages of gasoline, rolling blackout, fuel, food supplies such as vegetables yet it is still winter. He expects the situation to get worse. His mother is still suffering from an aftershock of the world’s worst disaster in 100 years.

He pauses for about two minutes, engrossed in deep thought and resumes: “The telephone lines, electricity lines have all broken. It is difficult to communicate to those at home.” He had last talked to her four days before.

The March 11 earthquake and tsunami left the country’s infrastructure, property and general economy in near ruins. Around 4.4 million households in northeastern Japan were left without electricity and 1.5 million without water. Many electricity generators collapsed and at least three nuclear reactors suffered explosions due to hydrogen gas that built up within their outer containment buildings. As at March 31, Japan’s National Police Agency said at least 11,417 people died in the earthquake and tsunami, while another 16,273 are listed as missing.

“No victims from Uganda have been reported. Even the governments of Japan and Uganda do not know the exact number of the dead. The death toll keeps rising but by now all foreign victims of earthquake and tsunami are being confirmed by their own families,” Nakano said.

Has it affected the businesses in Uganda

Japanese automotive industry was the world’s largest vehicle manufacturer in 2008, second after China in 2009. Japanese automotive manufacturers include Toyota (Nagakute-cho, Aichi), Honda, Daihatsu, Nissan, Suzuki, Mazda, Mitsubishi, Subaru, Isuzu, Kawasaki, Yamaha, and Mitsuoka.

North-eastern Japan is a major centre for vehicle production, with a myriad of parts suppliers and a network of roads and ports for speedy distribution. It also houses steel plants, oil refineries, nuclear power plants – some severely damaged by the disaster -and factories making parts for electronics.

These companies are reeling from tsunami damage to factories and suppliers in the quake-hit northeastern Japan, suffering from fuel shortages nationwide and power outages in the Tokyo area. These problems are affecting production, distribution, and prompted the closure of certain plants.

“Big companies like Nissan, Toyota and Mitsubishi are likely to be affected by low production. The government of Japan is making its utmost efforts together with the people of the entire nation to overcome this difficult time. I believe that companies will recover soon and activities will get to their original state,” Nakano says.

Uganda imports most of its auto products, especially vehicles, from Japan. Local companies like Auto City Tadashi, Yuasa, Japan Auto (all in Nakawa Division) trade in vehicle imports from various Japanese motor manufacturers.

However, Valerie Makarie, sales manager of Nissan Kampala, said the tsunami has not affected the big auto companies and he does not expect a big impact. Because over the years, the big auto companies have shifted the bulk of their production from Japan to other countries.

For instance, according to Makarie, Nissan Uganda imports 40% of new cars from Japan, 10% from Europe and 50% from South Africa. Thus the tsunami could only affect Nissan’s 40% production in Japan.

He adds: “The Ugandan market for vehicles is very small. Even if the companies [in Japan] don’t work for four weeks, we’ll (Nissan) still have vehicles for sale.” However, Joseph Tinkamanyire, National Sales Manager of Toyota Uganda on March 24 says: “Some of the motor companies have closed production until next week. The production might have been affected but I don’t know who is affected.” He insisted the tsunami will have an impact but said it is too early to estimate it.

“It is only 3 weeks after the Tsunami, what we fear is that the production for April will be affected,” Tinkamanyire said.

“Possible effects might be delayed shipments and production. It is however too early to establish the effect on motor business,” says David Otti, Administration Manager of Victoria Motors Ltd.

He explained that shipments which were for March are expected early this month. The company imports only Mitsubishi cars from Mitsubishi, southern Japan. Otti said.

Coin Ltd in Ntinda Industrial Area deals in used and new Toyota cars. The sales manager, Ali Balikowa, says that before the tsunami, one of the used cars was priced at Shs11.5 million, but its price had risen to 12.5 million by March 25. However, Balikowa says the tsunami has not affected shipment charges (US$ 1500). But he fears there will be price increases on Japanese imports as it might take the local dealers a year to import cars in large quantities due to the low production in Japan.

Richard Mponyoka, Director of Bugwere Sports Centre, is considering changing business if Japan imports become unbearably expensive. “I have sold secondhand sports equipment from Japan since 1999. If the tsunami greatly increases the import prices, causes delays or makes the trade in these goods very expensive, I will change the line of trade or import from elsewhere,” he says.

He received his last consignment in February and will place more orders when the current stock runs out.

Rita, a dealer in cameras, batteries and video lights from Japan says the tsunami has increased import prices of Japanese products from Dubai, but added that the falling shilling against the dollar has worsened the situation in Uganda.

It’s not only the Japanese auto industry that has been affected by the tsunami. Some traders in Japanese foods have been hit too. Kyoto Japanese Restaurant and Night Club at Centenary Park Gardens in Kampala is famous for Japanese Sushi and Pizzeria. Its main customers are foreigners especially Japanese, Chinese and Ugandans who have been to Japan or just love the food. The shortage of the food imports has affected their business.

Mustafa Kanmaz, the Managing Director, says: “The tsunami has affected the supply and increased the prices of Arabian foods. We get fish supplies from Ocean Glory.”

Kanmaz says although some raw materials are bought from the local markets, others like Wasabi (chili), Nori (used for wrapping the Sushi) and Japanese wines are imported.

Jamillah Bwaffar, sales officer of Ocean Glory, attributed the increasing prices on imported fish to fuel costs. “The high fuel prices have pushed up the costs of transporting the imports from Mombasa and South Africa, which have increased the prices of some fish types,” she says. The company imports and distributes Tuna, Red Sniper, Prawns octopuses and squids to Kyoto Restaurant, and some supermarkets nationwide.

Meanwhile bank accounts have been established for relief contributions through the Japanese Red Cross Society. The general public and corporations can remit their contributions to Sumitomo Mitsui Banking Corporation (Ginza Branch) on account number 8047670 (Ordinary Account) to the Japanese Red Cross Society, Tokyo, which will pass over the relief assistance to the victims.